Having resumed full ownership of its premises in Central in the middle of last year, the Hong Kong Club is looking forward to rental income of at least HK$60 million from this financial year on.

Even better, it pays government land rent of just HK$324 a year, thanks to a 999-year lease inked in February 1895, after the club was formed by eight taipans in 1846.

A few blocks away in Harcourt Road, Wan Chai, the Hong Kong Red Cross pays HK$1,370 for its Anne Black headquarters, while the Chinese Anglican Church is charged HK$1,000 for its St James' Settlement Multi-Service Community Centre in Stone Nullah Lane.

Many of the tycoons who enjoy the Hong Kong Club's exclusive facilities would probably welcome such a deal for their own businesses. In addition, the club paid no premium for the land from which it will now reap tens of millions of dollars a year.

Under a 1983 deal, Hong Kong Land redeveloped the prime site next to Statue Square and opposite the Legislative Council building into a 24-floor tower.

It took rental income for 25 years from all but four podium floors reserved by the club for bars, restaurants, a fitness centre with two squash courts, a billiard room and four bowling alleys. The club also took a small portion of rental income from the higher floors.

Since the arrangement ended last year the club has signed several new tenancy agreements with regional and Wall Street investment bankers such as Davis Polk, which moved into room 1904 for HK$185,570 a month, and Somerley, which took up the 10th floor for three years to September 2012 for HK$590,784 a month.

'The budgeted rental for [2009] is HK$61.9 million, up from HK$28.2 million in 2008,' the club wrote in its latest annual report.

Publicly, it has nothing further to say about its low land rent and rising rental income. Responding to inquiries it said: 'As we are a private club, we thus have no comment on the subject.'

The redevelopment plans took shape while Hong Kong's future was being negotiated between premier Zhao Ziyang and British prime minister Margaret Thatcher.

There was intense debate in the club and among the public about whether the old building should be torn down. Preservationists led by the Heritage Society proposed saving the 80-year-old Victorian structure, while the club management expressed concerns about potential fire and structural hazards in the largely-timber building. It prevailed.

The club's membership list, which reads like a Who's Who of the city's business elite, includes 1,400 resident members and about 2,500 absent members. The current chairman is Swire Properties chief executive Martin Cubbon with Wing On International Holdings director Bill Kwok Chi-piu as vice-chairman. Other board members include William Elkin Mocatta, director of Sir Elly Kadoorie & Sons, which oversees Kadoorie family interests in Hong Kong and overseas.

The Lands Department says the Hong Kong Club and others were given land free or with nominal premium payments to promote recreational development. It sees no problems with the Hong Kong Club's commercial arrangements, saying the land is not restricted to recreational use.

'The granting of a private recreational lease at nominal premium may be approved provided that the relevant policy bureau gives support to the application and the grant is agreeable in all circumstances,' a spokesman said.

Privately owned land in Hong Kong is mostly held under a government lease by which land owners have to pay rent to the government in return for the right to hold and occupy the land for a specified term.

Most rents, imposed under the Government Rent (Assessment and Collection) Ordinance, are 3 per cent of the rateable value of the property.

Private social and sports clubs, however, benefited from extraordinarily low land rents from the colonial days until the handover in 1997.

The Hong Kong Football Club, which paid HK$1,000 a year until December 1996, has been charged 3 per cent of its rateable value since 1997 - an estimated HK$850,000 this year on a rateable value of HK$28.5 million. But some clubs still enjoy low rents - Hong Kong Golf Club pays HK$1,808 a year for its 160-hectare course in Fanling.

The Hong Kong Club is among more than 20 private clubs that cater exclusively for the upper class.

Most, such as Craigengower Cricket Club and the Hong Kong Football Club, are owned by non-profit-making entities formed by their members, while a few, like the Aberdeen Marina Club, are held and operated by private companies.

All limit the size of their membership, and to become a member requires money, connections and time - in some cases the waiting list is 30 years or more. A transferable corporate membership traded on the second-hand market is the only short cut - but the prices are high.

Records of Everfine Membership Services show that the Hong Kong Golf Club is the most expensive, with a case of membership changing hands for HK$9.5 million earlier this year and one on the market for HK$9.7 million.

Aberdeen Marina Club and the American Club are the most popular among the new rich as their prices are relatively affordable - HK$1.9 million to HK$2 million.

'People are willing to pay millions to bid for a membership from the second-hand market as most of these private clubs no longer recruit new members or already have a long queue lining up for a vacancy,' said Athena Wong, director of Everfine.